JARVIS BUYS RESORT HOTELS FOR £43.5m
IN Caterer's annual UK Top 50 Hotel Groups Survey, published last week, Jarvis Hotels was in 10th place. This week, following its acquisition of Resort Hotels, the group headed by John Jarvis has leapt into fifth spot with 5,142 bedrooms.
Mr Jarvis and his deputy chief executive, David Thomas, have negotiated a deal worth £43.5m, of which £20m is in the form of debenture stock, £9m cash and the balance in assumed debts.
Resort managing director Roland Lewis told Caterer he estimated the company's bankers would have to write off about £30m, although it is hoped trade creditors will be paid in full.
Shareholders in Resort, whose stock market listing was suspended last July, will get £2m worth of vouchers redeemable in the enlarged Jarvis Hotels group. Each shareholder will get between £150 and £750.
"Our intention was to issue warrants that would have had some value upon the flotation of Jarvis Hotels, but in the end it proved technically impossible," Mr Lewis explained.
That will be of little comfort to his predecessor, Robert Feld, whose family built Resort from scratch into a 50-strong hotel group through acquisitions and management contracts.
The Resort name will now disappear and Mr Lewis is currently sorting out the five remaining management contracts. These would be "redirected to a few interested parties", he said.
The company's Brighton head office is to be closed, with the loss of about 30 jobs, although all 1,200 staff in the 20 hotels and two restaurants Jarvis is acquiring are being retained.
A further nine head office staff are being taken on by Jarvis, including operations director John Levis and two of his team, Andrew Mangion and John Garvey.
The hotels Jarvis is acquiring include the Norfolk Resort and Preston Resort hotels in Brighton, Ye Olde Bell Hotel near Maidenhead, Berkshire, and the Wentloog Resort Hotel near Cardiff. It is also buying the Pavilion End Pub in the City of London and Eaton Garden restaurant in Hove, East Sussex.
The company has also taken on the management of two other unnamed properties from the former Resort network, with a total of 212 bedrooms.
Mr Jarvis told Caterer the size of the company - 61 wholly owned properties and nine management contracts - was now such that his plans for a flotation would be brought forward to the middle of next year. It will have a market value of about £250m-£260m.
In terms of size he now lies one place behind Hilton, the company he resigned from in 1990 to realise a life-long dream of owning his own hotel. It will be interesting to see how soon he further closes the gap.
